Duran v. City of Corpus Christi

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT December 21, 2005
Charles R. Fulbruge III
Clerk
No. 05-40214
TOMAS DURAN,
Plaintiff-Appellant,
versus
CITY OF CORPUS CHRISTI; ET AL,
Defendants,
CITY OF CORPUS CHRISTI; DAVID GARCIA; DONNA JAMES; LEE DUMBAULD;
KEITH McNEELY; McGRIFF, SEIBELS & WILLIAMS, INC.,
Defendants-Appellees.
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Appeal from the United States District Court
for the Southern District of Texas
(2:04-CV-500)
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Before REAVLEY, DAVIS, and WIENER, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant Tomas Duran (“Duran”) sued Defendants-
Appellees the City of Corpus Christi, David Garcia, Donna James,
Lee Dumbauld, Keith McNeely, and McGriff, Seibels & Williams, Inc.,
asserting claims under 42 U.S.C. § 1983, the Racketeer Influenced
and Corrupt Organizations Act1 (“RICO”), and Texas’s state law of
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1
18 U.S.C. § 1961 et seq.
negligent misrepresentation. The district court dismissed all of
Duran’s claims. We affirm in part, and reverse and remand in part.
Duran alleged that he is a licensed insurance agent who in
2003 prepared a bid on behalf of Entrust, Inc., for Entrust to
administer the City of Corpus Christi’s (“the City”) health care
program. According to Duran’s complaint, the City rejected
Entrust’s bid in retaliation for Duran’s past complaints to the
City and its officers about the City’s allegedly fraudulent use of
public funds. In addition, Duran alleges that the City’s allegedly
fraudulent use of public funds constituted mail and wire fraud that
injured Duran, rendering the Defendants liable to him under RICO.
And, finally, Duran alleges that the City and its officers made
negligent misrepresentations to him throughout the course of their
allegedly fraudulent use of public funds.
Defendants the City, Garcia, James, and Dumbauld moved to
dismiss all of Duran’s claims under Federal Rule of Civil Procedure
12(b)(6) for failure to state any claims on which relief could be
granted. In a very thorough order, the district court (1) granted
each Defendant’s motion to dismiss, and (2) dismissed sua
sponte all of Duran’s claims against Defendants McNeely and
McGriff, Seibels & Williams, Inc., for failure to state any claims
against those defendants.
Given the care with which the district court addressed Duran’s
complaint, we decline to reiterate much of the well and accurately
explicated facts and law in this case. Rather, for the reasons
2
stated in the district court’s order, we affirm dismissal of (1)
all of Duran’s RICO claims, (2) all of Duran’s negligent
misrepresentation claims, and (3) Duran’s § 1983 claims against
Defendants Garcia, James, Dumbauld, McNeely, and McGriff, Seibels
& Williams, Inc.
The district court’s only error was in its treatment of
Duran’s direct § 1983 claim against the City. As it did with
Duran’s other claims, the district court dismissed this claim under
Rule 12(b)(6), reasoning that Duran (1) failed to “allege[] that
the City has a policy or custom of retaliating against individuals
who criticize it or its decisionmakers,” and (2) failed to “allege
that the City Council’s decision not to renew the Entrust contract
was ‘substantially motivated’ by [Duran’s] protected speech.” On
appeal, Duran has made no effort to direct our attention to any
allegations in his complaint that rebut the district court’s
conclusions. Given the standard under which we must review a Rule
12(b)(6) dismissal,2 however, we have searched Duran’s complaint
2
Generally, 12(b)(6) motions to dismiss are disfavored: The
motion should not be granted “unless the plaintiff would not be
entitled to relief under any set of facts or any possible theory
that he could prove consistent with the allegations in the
complaint.” Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999).
“The complaint must be liberally construed in favor of the
plaintiff, and all facts pleaded in the complaint must be taken as
true.” Lowrey v. Tex. A&M Univ. Sys., 117 F.3d 242, 247 (5th Cir.
1997). But our fealty to the plaintiff’s complaint does not extend
to “conclusory allegations or unwarranted deductions of fact.”
Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.
2000). Surviving a 12(b)(6) motion thus requires that a plaintiff
invoke something more than mere conclusions. See Schultea v. Wood,
47 F.3d 1427, 1431 (5th Cir. 1995) (en banc) (“Significantly, the
3
for any statements that sufficiently allege that (1) the City
retaliated against him pursuant to official policy, and (2) the
City’s allegedly retaliatory action was substantially motivated by
his speech. Finding a surfeit of allegations on both points, we
reverse the district court’s dismissal of this § 1983 claim.
Section 1983 establishes a civil cause of action to redress
the deprivation of federal constitutional and statutory rights by
state officials.3 As the district court reasoned, stating a § 1983
First Amendment retaliation claim directly against a municipality
requires that the plaintiff allege facts tending to show, inter
alia, that (1) the municipality acted pursuant to official policy
or custom,4 and (2) the municipality’s allegedly retaliatory action
was substantially motivated by the plaintiff’s speech.5
First, we hold that in his complaint Duran did sufficiently
allege that, in retaliating against him, the City acted pursuant to
official policy. This circuit defines “policy” to include a
“decision that is officially adopted and promulgated by the
requirement of making a short and plain statement demands more than
a statement of conclusions . . . .”). Moreover, “[d]ismissal is
proper if the complaint lacks an allegation regarding a required
element necessary to obtain relief.” Blackburn v. City of
Marshall, 42 F.3d 925, 931 (5th Cir. 1995) (emphasis added).
3
42 U.S.C. § 1983.
4
Monell v. Dep’t of Social Servs., 436 U.S. 658, 694 (1978);
Tharling v. Port of Lavaca, 329 F.3d 422, 427 (5th Cir. 2003).
5
Keenan v. Tejeda, 290 F.3d 252, 258 (5th Cir. 2002);
Kennedy v. Tangipahoa Parish Library Bd. of Control, 224 F.3d 359,
366 (5th Cir. 2000).
4
municipality’s lawmaking officers . . . .”6 Here, Duran alleged
that the City’s lawmaking body —— the City Council7 —— officially
adopted the decision to “select[] [a competing bid] and . . .
reject[]” the Entrust bid that Duran prepared. As that rejection
is precisely the action that Duran contends was retaliatory, the
“policy” requirement is satisfied.
Second, we hold that Duran sufficiently alleged that his
complaints regarding the City’s allegedly fraudulent use of public
funds substantially motivated the City’s rejection of the Entrust
bid. As the district court noted, the City could have been
substantially motivated by Duran’s speech only if it knew of his
speech.8 Thus, we focus our examination on whether Duran
sufficiently alleged facts tending to show that the City knew of
his allegedly protected speech, and, if so, whether the City’s
knowledge substantially motivated its decision.9 We conclude that
the following allegations in Duran’s complaint sufficiently alleged
6
Johnson v. Moore, 958 F.2d 92, 94 (5th Cir. 1992).
7
See CHARTER OF THE CITY OF CORPUS CHRISTI art. I, § 3 (“[A]ll
powers of the city shall be vested in an elective council . . .
which shall . . . determine policies.”); id. § 4 (“The legislative
power of the city is vested in the city council.”).
8
See Tharling, 329 F.3d at 428 (“It is axiomatic that a party
cannot be ‘substantially motivated’ by a circumstance of which that
party is unaware.”).
9
Because the City Council, as the City’s lawmaking authority,
is the body that actually carried out the retaliatory action
alleged by Duran, our search for allegations of the City’s
awareness of Duran’s speech is actually a search for allegations
that the City Council was aware of Duran’s speech.
5
such facts. First, Duran alleged that he “informed . . . Mayor
Loyd Neal on numerous occasions that the fraud would likely result
in coverage denial by the insurance companies.” Under the City’s
charter, the mayor is a member of the City Council10; his knowledge
of Duran’s complaints is thus relevant to whether the City Council
knew of his complaints. Second, Duran alleged that he “informed
. . . City decision makers of the fraudulent scheme.” Third, Duran
alleged that he “informed the City of Corpus Christi that he
refused and failed to participate in the fraudulent scheme to
obtain insurance coverage for Laura Vasquez.” And, finally, Duran
alleged that “[t]he City’s failure to renew Plaintiff’s contract
was motivated by Plaintiff’s protected speech.”
Taken together, these allegations are sufficient to survive
the City’s Rule 12(b)(6) motion to dismiss. We therefore reverse
the district court’s dismissal of Duran’s § 1983 retaliation claim
directly against the City and remand his action for further
proceedings consistent with this opinion.
AFFIRMED in part; REVERSED and REMANDED in part.
10
See CHARTER OF THE CITY OF CORPUS CHRISTI art. II, § 1.
6